The United States Department of Justice (DOJ) recently agreed to withdraw its appeal of the ruling by the United States Court of Appeals for the District of Columbia Circuit that struck down the Department of Health and Human Services’ (HHS) rule that permitted insurers not to count drug manufacturer copay assistance towards a beneficiary’s deductible and out-of-pocket maximum.
The 2021 Notice of Benefits and Payment Parameters (NBPP) tried to resolve some confusion among industry stakeholders as to whether the 2020 NBPP required plans and issuers to count the value of drug manufacturers’ coupons toward the annual limitation on cost sharing (other than in circumstances where there was a medically appropriate generic equivalent available). Therefore, in the 2021 NBPP, it was noted that “Notwithstanding any other provision of this section, and to the extent consistent with State law, amounts paid toward reducing the cost sharing incurred by an enrollee using any form of direct support offered by drug manufacturers for specific prescription drugs may be, but are not required to be, counted toward the annual limitation on cost sharing, as defined in paragraph (a) of this section.”
The 2021 NBPP was initially challenged by three individuals and three patient advocacy groups. Those plaintiffs argued that the 2021 NBPP allowed health insurance issuers and group health plans to decline to credit certain financial assistance provided to patients by drug manufacturers when calculating whether those patients met their cost-sharing obligations under the Affordable Care Act, in conflict with the Affordable Care Act’s definition of “cost sharing,” the agencies’ preexisting regulatory definition of “cost sharing,” and was arbitrary and capricious.
In September 2023, the Court agreed with the plaintiffs and found that the 2021 NBPP “must be set aside based on its contradictory reading of the same statutory and regulatory language and the fact that the agencies have yet to offer a definitive interpretation of this language that would support the rule.” In so finding, the Court vacated the 2021 NBPP.
Then, in December 2023, the same Court issued a second opinion that clarified that the first decision did mean that the prior rule remained in effect, as the 2021 NBPP was vacated. This means that the 2020 Notice of Benefits and Payment Parameters, which requires copay assistance to count as patient cost-sharing for prescription drugs (except for brand name drugs with a generic equivalent), remained in place.
Reactions to the Stipulation
“We appreciate the Biden Administration’s decision to abandon its appeal on a patient-fought and won court case that maintains access to life-saving medicine,” said Senator Roger Marshall. “Patient assistance programs help vulnerable Americans and families pay for specialty medications that treat chronic and rare conditions. Applying patient assistance towards deductibles and out-of-pocket costs has always been the law of the land. I’m relieved the Biden Administration won’t cause patients further trauma and uncertainty by challenging the court’s decision. I urge my colleagues to pass the bipartisan, bicameral HELP Copays Act and cement this victory.”
“We are pleased that the government has withdrawn its appeal of our court victory for patients who struggle to afford their prescription drugs and rely on copay assistance,” said Carl Schmid, executive director of the HIV+Hepatitis Policy Institute, one of the plaintiffs in the lawsuit. “Now, insurers must heed the court ruling by ending their cruel policy of collecting copay assistance and not applying it to patients’ cost-sharing obligations.”
“Now that the government has dropped its appeal, we hope this is a signal they will accept and enforce the court ruling and issue guidance stating that copay assistance, in most instances, must count for patients,” said George Huntley, CEO of additional plaintiffs the Diabetes Leadership Council and the Diabetes Patient Advocacy Coalition. “They also have stated they will pursue a new rule regarding copay assistance. While the current rule is sufficient in our view and remains in effect, if they move forward with a new rule, it must ensure that copay assistance counts.”